¹ Cooper, Richard N., “Trade Policy Is Foreign Policy,” Foreign Policy, No. 9 (Winter 1972), 18–36.CrossRefGoogle Scholar

² Baldwin, Robert, “The Political Economy of Postwar U.S. Trade Policy,” The Bulletin, No. 4 (1976), 5–37Google Scholar; Krasner, Stephen D., “U.S. Commercial and Monetary Policy: Unravelling the Paradox of External Strength and Internal Weakness,” International Organization, XXXI (Autumn 1977), 635–71.CrossRefGoogle Scholar

³ Model, Leo, “The Politics of Private Foreign Investment,” Foreign Affairs, VL (July 1967), 638–51.Google Scholar

⁴ “The Top One Hundred Economies,” Across the Board, XVII (May 1980), 9.

⁵ For example, see Odeli, John S., “The U.S. and the Emergence of Flexible Exchange Rates: An Analysis of Foreign Policy Change,” International Organization, XXXIII (Winter 1979), 57–81.CrossRefGoogle Scholar

⁶ For example, see Einhorn, Jessica Pernitz, Expropriation Politics (Lexington, Mass.: D.C. Heath/Lexington Books, 1974).Google Scholar

⁷ Gilpin, Robert, U.S. Power and the Multinational Corporation: The Political Economy of Foreign Direct Investment (New York: Basic Books, 1975)CrossRefGoogle Scholar; Katzen-strin, Peter J., “Introduction: Domestic and International Forces and Strategies of Foreign Economic Policy,” International Organization, XXXI (Autumn 1977), 587–606CrossRefGoogle Scholar; Krasner, Stephen D., Defending the National Interest: Raw Materials Investments and US. Foreign Policy (Princeton: Princeton University Press, 1978).Google Scholar

⁸ Ibid., 1–2.

⁹ Gilpin (fn. 7).

¹⁰ Pastor, , Congress and the Politics of US. Foreign Economic Policy, 1929–1976 (Berkeley and Los Angeles: University of California Press, 1980), 197–98.Google Scholar

¹¹ For a discussion that considers other Marxist approaches and finds value in them, see McGowan, Pat and Walker, Stephen G., “Radical and Conventional Models of U.S. Foreign Economic Policy Making,” World Politics, XXXIII (April 1981), 347–82.CrossRefGoogle Scholar Our approach also differs from that of McGowan and Walker in our evaluation of the usefulness of the typology of Theodore Lowi (see below).

¹² Olson, Mancur L., The Logic of Collective Action (Cambridge: Harvard University Press, 1965), 16–22Google Scholar; Posner, Richard L., “Theories of Economic Regulation,” Bell Journal of Economics and Management Science, V (Autumn 1974), 355–58.Google Scholar

¹³ Lowi, Theodore J., “American Business, Public Policy, Case-Studies, and Political Theory,” World Politics, XVI (July 1964), 677–715.CrossRefGoogle Scholar

¹⁴ A vast literature discusses how interested groups sell policies—particularly under the guise of “regulation”—for ends that are mainly redistributive; i.e., they shift burdens away from, and bring benefits to, the group in question. The tariff policies Lowi cites as examples are almost all heavily, if not entirely, redistributive in this sense. The tariff, when applied to a specific commodity, protects the factors of production specific to that commodity (“regulatory”); when the same question is addressed at the sector level, both total costs and benefits are higher (“distributive”); and if the question is put in terms of general protection, there may even be an impact on the relative earnings of capital and labor (“redistributive”). The relevance of the tariff to the Lowi's third arena is only inferred, although elsewhere he comes close to acknowledging that: “it is interesting to note the absence of a foreign policy variant of redistribution. This might be due to my incomplete coverage rather than to a datum about the system. Devaluation might be an example of a redistributive use of resources in foreign policy.” (Lowi, , “Making Democracy Safe for the World: National Politics and Foreign Policy,” in Rosenau, James N., ed., Domestic Sources of Foreign Policy [New York: Free Press, 1967], 325).Google Scholar It is well known, however, that devaluation is equivalent on trade account to a uniform tariff on imports and a uniform subsidy on exports. The essential difference among the three categories is the size and stake of the affected parties. There is no satisfactory explanation in Lowi for how tariff issues moved from his “distributive” to his “regulative” arena over time.

¹⁵ For some pioneering American contributions, see Samuelson, Paul A., “The Pure Theory of Public Expenditure,” Review of Economics and Statistics, XXXVI (November 1954), 387–89CrossRefGoogle Scholar; Buchanan, James and Tullock, Gordon, The Calculus of Consent (Ann Arbor: University of Michigan Press, 1962)CrossRefGoogle Scholar; and Olson (fn. 12).

¹⁶ Willett, Thomas D., “Some Aspects of the Public Choice Approach to International Economic Relations,” mimeo (Claremont Working Paper, Department of Economics, Claremont Graduate School, 1980), 29.Google Scholar

¹⁷ Bobrow, Davis B., Kudrle, Robert T., and Stoker, Robert P., “Accountability Initiatives and Accountability Constraints: Bargaining Between the U.S. and the N.I.E.O.,” Jerusalem Journal of International Relations, V (Fall 1980), 27–65.Google Scholar

¹⁸ Keohane, Robert O., “American Policy and the Trade-Growth Struggle,” International Security, III (Fall 1978), 20–43CrossRefGoogle Scholar; Viner, Jacob, “Power versus Plenty as Objectives of Foreign Policy in the Seventeenth and Eighteenth Centuries,” World Politics, 1 (October 1948), 1–29.CrossRefGoogle Scholar It will be noted that these values are not specific to a particular form of economic organization; a state's political economy will, of course, largely determine who its international adversaries are.

¹⁹ We are here mainly describing informed opinion rather than opinion reflected in public opinion polls; the latter has usually been much less internationalist and, on economie matters, more protectionist. Nevertheless, even by the late 1970s, after much sensational discussion of the negative effects of both incoming and outgoing foreign investment, a majority of Americans either favored both phenomena or had no feelings about them. See Piper, Don C., “Foreign Direct Investment in the United States,” in Piper, Don C. and Tercheck, Donald, eds., Foreign Policy as Public Policy (Washington, D.C.: American Enterprise Institute, forthcoming).Google Scholar

²⁰ Wilson, James Q., Political Organizations (New York: Basic Books, 1973)Google Scholar; Olson (fn. 12).

²¹ Survey of Current Business, various issues; see Vcrnon, Raymond, Sovereignty at Bay: The Multinational Spread of US. Enterprises (New York: Basic Books, 1971)Google Scholar, and his Storm Over the Multinationals: The Real Issues (Cambridge: Harvard Univer sity Press, 1977), for a history of the development of OFDI.

²² Sametz, Arnold W., “The Foreign Multinational Company in the United States,” in Backman, Jules, ed., Multinational Companies, Trade and the Dollar in the Seventies (New York: New York University Press, 1974), 87–105.Google Scholar

²³ Pastor (fn. 10), 217.

²⁴ Fred L. Morrison, “Legal Regulation of Alien Land Ownership in the United States,” U.S. Department of Commerce, Foreign Direct Investment in the United States (1975)Google Scholar, Appendix M.

²⁵ The Executive was given power to subpoena foreign corporate records in the United States; new disclosure and reporting requirements were implemented by the S.E.C.; the Department of Defense developed a tighter set of regulations to prevent foreign control of firms engaged in classified work; the Department of Agriculture was charged with monitoring foreign investment in farmlands; and the Department of Energy was asked to keep track of activities of foreign-owned energy firms.

²⁸ U.S., Congress, House, Committee on Government Operations, The Adequacy of the Federal Response to Foreign Investment in the United States, 96th Cong., 2d sess., 1980Google Scholar, H. Rept. 96–1216.

²⁷ Pastor (fn. 10), 242.

²⁸ David M. Phillips, “Legal Restraints on Foreign Direct Investment in the United States,” U.S. Department of Commerce, Foreign Direct Investment in the United States, 1975Google Scholar, Appendix K.

²⁹ Six states had general prohibitions on the ownership of land by aliens (although five had exemptions for resident aliens or those intending to become citizens). Several other states did not permit aliens to own agricultural land, or restricted the size of foreign-owned real estate holdings. While in some states such discrimination could be overcome through corporate investment, in others there also were prohibitions on the corporate ownership of land. Morrison (fn. 24), M–17, 18.

³⁰ Kindleberger, Charles P., American Business Abroad: Six Lectures on Direct Investment (New Haven: Yale University Press, 1969), 113.Google Scholar

³¹ See Fred Bergsten, C., Horst, Thomas, and Moran, Theodore H., American Multinationals and American Interests (Washington, D.C.: Brookings Institution, 1978), 22–23.Google Scholar

³² Musgrave, Peggy B., Direct Investment Abroad and the Multinationals: Effects on the United States Economy, prepared for the use of the Subcommittee on Multinational Corporations of the Committee on Foreign Relations, U.S. Senate (1975).Google Scholar

³³ Bergsten and others (fn. 31), 23–24.

³⁴ The most notable positive policy toward this end was the longstanding practice, since reduced, of allowing tax credits for what are essentially excise (not profits) taxes paid by the oil companies to the oil-producing countries (ibid., 67–68).

³⁵ For a comprehensive discussion of congressional treatment of foreign investment that pays particular attention to labor's point of view, see Hughes, Kent Higgon, Taxes, Trade, and Transnationals: International Decision Making in the Congress (New York: Praeger, 1979).Google Scholar

³⁶ Our criteria and quasi-criteria do not include development per se because the U.S. has not accepted the prosperity of others as a major responsibility except under special national security circumstances such as in postwar Europe (Bobrow, Kudrle, and Stoker, fn. 17).

³⁷ Wilkins, Mira, The Maturing of Multinational Enterprise (Cambridge: Harvard University Press, 1974), 332–33.CrossRefGoogle Scholar

³⁸ Moran, Theodore H., “Multinational Corporations and Dependency,” International Organization, XXXII (Winter 1978), 79–100.CrossRefGoogle Scholar

³⁹ Congressional Quarterly Almanac (1974, 519–625; 1977, 390–92; 1978, 267–83).

⁴⁰ The evolutionary impact of OFDI on nations pursuing policies repugnant on other grounds (e.g., apartheid in the Republic of South Africa) raises similar questions, but in much murkier form. Racist policies may undermine long-run U.S. security and autonomy interests in Southern Africa, but they do not pose an immediate perceived threat to our criteria and quasi-criteria that is comparable to the Soviet Union and the Warsaw Pact. These less direct and immediate security costs are not competitive with our criterion of domestic prosperity. As we would expect, U.S. policy on outflow has not involved controls that are as stringent for South Africa as they are for the Soviet Union; nor is it likely to do so in the foreseeable future.

⁴¹ Olson, Richard Stuart, “Expropriation and Economic Coercion in World Politics,” Journal of Developing Areas, XXXI (April 1979), 247–62Google Scholar, and his “Economic Coercion in World Politics,” World Politics, XXXI (July 1979), 471–94; Einhorn (fn. 6); Pinelo, Adalbert J., The Multinational Corporation as a Force in Latin-American Politics (New York: Praeger, 1973).Google Scholar

⁴² Pinelo, ibid; Einhorn (fn. 6).

⁴³ Moran, Theodore H., “Transnational Strategies of Protection and Defense by Multinational Corporations,” International Organization, XXVII (Spring 1973), 273–87CrossRefGoogle Scholar; Seidman, Ann, ed., Natural Resources and National Welfare (New York: Praeger, 1975).Google Scholar

⁴⁴ Yoshino, M. Y., “Japan as Host to the International Corporation,” in Kindleberger, Charles P., ed., The International Corporation (Cambridge: M.I.T. Press, 1970), 345–69.Google Scholar

⁴⁵ Bergsten and others (fn. 31), chap. 7.

⁴⁶ Pastor (fn. 10), chap. 6.

⁴⁷ Strange, Susan, “The Management of Surplus Capacity,” International Organization, XXXIII (Summer 1979), 303–34.CrossRefGoogle Scholar

⁴⁸ The prospect of “investment wars” among OECD countries, triggered by U.S. demands for incoming foreign investment (e.g., by the U.A.W. for Japanese auto plants in the U.S.), needs to be kept in perspective. The size of the auto industry makes it a special case. In addition, Japanese automobile manufacturers have economic incentives for IFDI in the U.S. as their manufacturing costs are rapidly climbing to U.S. levels. We tend to agree with the expectations of Krasner rather than with those of Bergsten. See Krasner, Stephen D., “The Tokyo Round: Particularistic Interests and Prospects for Stability in the Global Trading System,” International Studies Quarterly, XXIII (December 1979), 491–531CrossRefGoogle Scholar, and Fred Bergsten, C., “Coming Investment Wars?,” Foreign Affairs, Vol. 53 (October 1974), 135–52.CrossRefGoogle Scholar

⁴⁹ Vagts, Detlev, “The Corporate Alien,” Harvard Law Review, Vol. 74 (June 1961), 1489–1551.CrossRefGoogle Scholar

⁵⁰ Bergsten and others (fn. 31), 466.

⁵¹ See the discussion in Business Week, No. 2643 (June 30, 1980).